Tuesday, July 5, 2011

The widening gap between the rich and the poor

The June statistics are out and the gap between the rich and poor is the U.S. has reached levels not seen since 1928 just before the great depression. I recently wrote an article about the gap itself for Helium and linked it through Redgage. I will leave both references below if you are interested. If you go though Helium, you only click once. If you go through Redgage, you click through twice (and I get paid for both views).

A writing friend commented to me that she didn't know what the answer was. Her comment started me thinking about long term solutions and short term solutions. I don't know what the answer is either and I know that there are plenty of Washington economists much well equipped to answer than I. But we have to find ways to survive.

In the article, I point out that part of the problem this increasing disparity creates is the inability for the middle class to remain the consumer class that has always driven out economy. And I think that remains true. The top 1% doesn't consume enough to drive the economy. After all, there are only so many houses and yachts that one needs.

So, short term survival for the rest of us 99% depends in some measure upon opting out of "consummerism." It may not be life off the grid, but it is a matter of mindset really. Creating wealth may be a far cry for some of us, but a realistic plan for getting out of debt is a neccessity if we are carrying debt. Find a plan that works for you and stick to it. (More on various tools and methods to come!)

And about this article, if you are not angry yet, please think about getting angry. At least one of the source that I looked at discussed looser lending practices as a means to quell the anger that the middle class and poor feel periodically about this huge gap.

this issue is touching everyone thanks to inflation and unequal taxes. The richer are getting richer as a result the gap is becoming wide. I feel the tax system needs to be restructured so that all can feel the pinch of high prices!

Oh this is a topic that really gnarls me, Audrey. I am at the bottom of the heap and always have been - childhood poverty, single mother of four kids, and now living on a teensy old age pension. My monthly income hasnt changed since the 70's, it has stayed about the same low amount..(other than short periods of better paying jobs)....but everything has gone up and up and up - housing, rent, bills and every single item one puts in her grocery cart. I cant afford to even go to the dentist and I need to.

It does make me angry when I hear of all the tax breaks, loopholes and bailouts for big corporations. No one bails the poor out. If people paid a percentage of their incomes it would be fairer - the rich peeoples' percentage would go a long way towards helping the economy - and those under 25,000 a year shouldnt have to pay any.

I dont have an answer for my situation, other than keeping on surviving.

But on a global level, I am very interested in micro-lending - for a very small amount of money - $30 to $50 - those of us with More can make an enormous difference in the life of a person in Third World countries. That small amount can provide them the means to make a small living for themselves and makes way more sense to me than donations to feed the poor, where huge administration costs eat up so much of the donation.

It is hard to lift oneself from the mire. Personally I am tired of not being able to make ends to meet. Sometimes going to work seems like such a waste of time but I had my children before they had maternity leave. I had to rely on assistance during my recovery so know that being one of the working poor is still better than relying on welfare. I had a husband (now ex) who never felt the need to maintain employment. Comments about the 47% and so forth are frustrating beyond belief.

I think refinancing your house is fine--so is refinancing any old debt which was at a higher rate. But it is really, the elimination of debt that needs to occur and an increase in savings. Debt is an awful thing.